Mortgage Settlement?

madgooner

Can someone help me with this settlement i have recieved from Abbey.
I have asked for settlement from Feb so this leaves me with 13 months.
Feb mortg: 153.59 per month
Loan at 6%
Capital Balance 2,071.89
Amount Uncleared 153.36 which matches Decembers payment
Interest 11.97
Early Repayment Charges £0
Repayment Fee 225.00

I thought it would be as simple as 13 months times £153.59 =£1994.07 so pardon my ignorance i thought i'm already paying 6%

Will be gratefull if anyone can explain how they have worked this out.

mountainofdebt

I'm assuming that you have a mortgage where the interest is calculated daily ....the settlement letter should state a daily interest rate....although I'm also unsure why December's payment would be uncleared - surely this would have cleared the account by now?

Is the £11.97 the daily interest rate?

btw at the mo I am in discussions with Abbey over the £225 repayment fee (which btw is repayable whether you wait until the natural end of the mortgage or repay it early) - I can't see in our offer letter where I agreed to this charge nor can I see it in the terms and conditions booklet they sent us with the offer letter....I will let you know how I get on!

madgooner

Thanks for your reply, i had a chat with the Abbey regarding that £225 last week. I had said to them keep my deeds they are worth nothing since the Land Registry have the records so can they drop that charge but they say its down to administrative charges. Just over the years every time i payed lump sums off it reduced my payments alot.
So if i'm going to pay this lump sum off how come it works out more than 13 months payment.

mountainofdebt

So the balance as at 01/01/07 would have been £1918.53, yes?

Now if that is the case, and interest is charged daily then the amount to be paid is obviously going to be less because you are not paying interest (abet on a decreasing sum) on money outstanding.

So assuming that you make no payments in January, the amount you owe Abbey in February is still £1918.53. So you are charged interest on that amount. But if you make your normal payment on say 28/02/07, as at 01/03/07 interest is being paid on £1765.17 and so on. Thus the small amounts of interest must add up to the difference between what your settlement figure and 13 monthly payments.

I still haven't heard from Abbey re the charge but will let you know what they say to me.